More sensors, despite strained supply chain
With a nearly 25% increase in new buildings and machinery, automation and measurement company Endress+Hauser delivered more sensors than ever in 2022 despite a strained supply chain. The April 4 annual media conference also noted record highs for incoming orders, sales and employment.
Learning Objectives
- Endress+Hauser increased shipments, investments, sales and employment in 2022, according to its annual press conference on April 4.
- Endress+Hauser invested 240.5 million euros in new buildings and machinery, 24.7% more than 2021.
- Even with strong operating results for Endress+Hauser, operating expenses increased faster than sales.
Sensors, instrumentation insights
- Endress+Hauser increased sensor shipments, investments, sales and employment in 2022, according to its annual press conference April 4, also making new training positions and setting succession and sustainability plans.
- The measurement and automation company Endress+Hauser invested 240.5 million euros in new buildings and machinery, 24.7% more than 2021.
More Endress+Hauser sensors were delivered in 2022 than ever, with worldwide shipments of more than 2.9 million, 43 new products and 235 patent applications, noted Endress+Hauser, Swiss-based automation and measurement company with US headquarters in Greenwood, Indiana, at its annual media conference, Aug. 4, in Basel, Switzerland. Edited information from the related event and press release follows.
Strong results in 2022; 2023 is 70th Endress+Hauser anniversary
Endress+Hauser achieved new highs in incoming orders, sales and employment in 2022. Russia’s attack on Ukraine clouded the outlook at the beginning of last year. Other issues in 2022 include threats of energy shortages in Europe, high inflation and rising interest rates in many countries, supply and logistics chains that are strained and persistent COVID lockdowns in China.
“Rarely has our business environment been characterized by so many challenges as in 2022,” said Matthias Altendorf, chief executive officer (CEO), Endress+Hauser Group, at the annual media conference. “Our business nevertheless developed stably throughout the year.”
While profits fell, Endress+Hauser, celebrating its 70th anniversary in 2023, remains confident for the current year.
The Endress+Hauser Group’s net sales rose 16.4% to 3.351 billion euros. Dr. Luc Schultheiss, chief financial officer (CFO), put the organic growth – excluding currency effects – at 11.6%. The company shipped more than 2.9 million instruments worldwide with reliable delivery performance. “Endress+Hauser has built efficient production and logistics networks over the years and we maintain long-term relationships with our suppliers,” Altendorf said.
All industries and regions contributed to the solid growth. Sales developed in the Americas and Asia-Pacific and strongly in Europe and the Middle East. Africa was the only region to experience a business decline. China maintained its position as the top-selling market followed by the USA, both now well ahead of Germany, the No. 3 market. Endress+Hauser’s process instrumentation and the sensor business of Innovative Sensor Technology IST performed well. As expected, demand for laboratory instruments from Analytik Jena fell slightly after the end of the pandemic.
At the annual Endress+Hauser media conference, left to right, on April 4, was Dr. H.C. Klaus Endress, supervisory board; Matthias Altendorf, chief executive officer (CEO), Endress+Hauser Group; Dr. Luc Schultheiss, chief financial officer (CFO); and Martin Raab, head of public communication, Endress+Hauser Group Services AG. Courtesy: Endress+Hauser
Investments in future of automation with new machinery, buildings
Endress+Hauser invested 240.5 million euros in new buildings and machinery, 24.7% more than 2021. This means more than 1 billion euros has been pumped into better infrastructure within the past five years. “With these investments we are laying the groundwork for future growth,” said Altendorf. Projects worth around 500 million euros are being implemented. The four largest involve locations in Maulburg, Germany; Suzhou, China; Jena, Germany; and Greenwood, Indiana
“Product innovations drive our growth,” Altendorf said. Endress+Hauser introduced 43 new products to the market in 2022. The Group spent 242.4 million euros — roughly 7.2% of sales — on research and development, 13.6% more than the previous year. The company applied for 235 patents for the first time at patent offices around the world, a testament to the Group’s innovative strength.
Last year was overshadowed by the closure of the Russian sales center as a result of the sanctions following the attack on Ukraine. An export ban on measurement technology to Russia led to the loss of 170 jobs. At the end of 2022, the family-owned company had 15,817 employees worldwide, an increase of 700 over 2021. New training positions were also created. In the future, 5% of all jobs will be set aside for interns, apprentices, students and trainees.
Endress+Hauser has recently joined the Science Based Targets initiative with the goal of reducing emissions to net-zero by 2050. Courtesy: Endress+Hauser
Strong operating results; operating expenses increased faster than sales
Currency effects and price increases boosted Endress+Hauser Group’s sales but weighed on the financial results. Because operating expenses rose at a faster pace than sales, operating profit grew by only 9.1% to 473.7 million euros. Endress+Hauser thus achieved an operating margin of 14.1%, 1 percentage point less than the previous year, “but still a highly respectable figure,” Schultheiss said.
Rising costs for currency hedging and, above all, high losses from financial investments resulted in a significantly negative financial result. Profit before taxes fell 12% to 408.1 million euros. A tax rate of 25.6% (up 2.5 percentage points) caused net income to fall by 14.9% to 303.5 million euros. The company has a solid financial footing. The equity ratio rose to 80.2%, 1.1 percentage points more than 2021. The group is virtually debt-free.
Supervisory Board President Klaus Endress is convinced that Endress+Hauser is active in a promising business area. Decarbonization and digitalization provided additional impetus. Courtesy: Endress+Hauser
Sustainability, environment, leadership planning
With 76 out of 100 points, Endress+Hauser again occupied a leading position in the 2022 EcoVadis sustainability benchmark and placed in the top percentile of the comparison group. The Endress+Hauser Group calculated its carbon footprint along the value chain as the basis for the development of a climate strategy. Endress+Hauser recently joined the Science Based Targets initiative with the goal of reducing emissions to net-zero by 2050.
When Dr. Klaus Endress leaves the supervisory board due to the age limit at the end of 2023, he will be succeeded by CEO Matthias Altendorf. Dr. Peter Selders, who heads the competence center for level and pressure measurement technology, will then take over as Endress+Hauser Group CEO. Steven Endress, currently managing director of Endress+Hauser UK, will take a seat on the supervisory board as a second representative of the shareholder family. “All of these decisions were made with the backing of the shareholders, the family and the supervisory board,” Klaus Endress, said.
With confidence into the 70th anniversary year
Because incoming orders grew another 8 percentage points faster than sales in 2022, Endress+Hauser started 2023 with a high volume of orders on hand. Incoming orders also developed positively in first-quarter 2023. While the Endress+Hauser Group expects the business to slow in the second half of the year, it still anticipates double-digit growth in 2023. Linked to this is the creation of 500 jobs worldwide.
Klaus Endress, supervisory board president, said the measurement technology specialist is active in a promising business area. Decarbonization and digitalization provided additional impetus. To mark the company’s birthday, Endress+Hauser is inviting more than 1,000 customers, partners and experts to Basel to discuss the sustainable transformation of the process industry.
“For 70 years we have done everything we can to ensure a good future – and we will continue to do so,” Altendorf said.
Media conference answers: Investments, digitalization
After the formal presentations at the media conference, the speakers took audience questions.
About where in the world investments will be made, Altendorf said investments will continue in the USA and in Asia, naming China and India, not only in Europe. Endress+Hauser doesn’t want to depend on one region of the world. Asked specifically about the Mexico market, Altendorf said Endress+Hauser investments there since the 1970s have helped in water and wastewater, energy management, food and beverage and petrochemical/oil and gas industries. Endress+Hauser has a very good business there and expects the country to open up for more.
When asked about industrial fieldbus investments, Altendorf said communications investments began with proprietary networks and continued with others, including Profibus, IO-Link, Ethernet APL and wireless networks, helping to enable digitalization.
“If you switch on your printer, you don’t have to do anything else,” Altendorf said, suggesting industrial automation and process control communications also need to be interoperable and easy to use. Even with the costs related to communications investments, Endress+Hauser sets records year after year, Altendorf said.
Edited by Mark T. Hoske, content manager, Control Engineering, CFE Media and Technology, mhoske@cfemedia.com.
KEYWORDS: Process sensors, process instrumentation, Endress+Hauser
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